Definitions

When we say:

activity statement – a form that businesses use to report and pay a number of tax obligations, including goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding, and fringe benefits tax; labels G1 to G11 will be the most relevant to calculating the activity statement ratios

associated parties – people and entities closely associated with you, such as relatives, partners in a partnership, directors of companies or closely connected companies or trusts

benchmark – small business benchmarks, consisting of ratios specific to business industries

business – businesses with a turnover up to $15 million

cost of sales – the cost of anything produced, manufactured, acquired or purchased, for either

manufacture

sale or exchange in deriving the gross proceeds

earnings of the business

For the purposes of calculating the benchmark, cost of sales excludes labour.

default assessment – an original or amended assessment of a taxpayer's income tax or GST obligations that we issue when:

insufficient or unreliable information has been reported on tax returns or activity statements

a taxpayer has not lodged a tax return or activity statement

We will only issue a default assessment when you are not able to provide accurate records or evidence that allows us to verify your business’s reported income, or if you refuse to lodge your tax returns after a number of requests

GST-free sales – goods or services not subject to GST and sold without GST in their price, reported at label G3 on your activity statement

key benchmark ratio – the benchmark we use to determine income or turnover and to identify businesses that may not be reporting some or all of their income

labour – salary and wage payments, including contractor payments (amounts exclude GST); it does not include payments to associated parties – for example, labour provided by a business owner or business partner

Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.